Big Problems Could Be Looming Ahead For TWIA

How much is six dollars a month? It is an awful lot when you live on a fixed income and are over retirement age like Maria Martinez. The landscape of the Texas coast is made up of people like Maria who live on a fixed monthly income and they still have bills to pay. When the cost of anything goes up it can have serious impacts on your budget and that is what has many coastal residents concerned.

On Tuesday, the Actuary and Underwriting Committee for the Texas Windstorm Insurance Association (TWIA) voted 5-2 in favor of recommending a 5 percent rate increase for policyholders to the TWIA Board of Directors which meets again on December 10 in Corpus Christi. It is unclear yet as to how the vote may end up when the meeting convenes in Corpus Christi but one thing is for sure, Coastal area residents will be out in force to speak their minds and those that have been chosen by them to represent them will be there ready to back them up.

According to TWIA, the average premium on a TWIA residential policy is approximately $1,600 per year. A 5 percent increase on that average would only increase a monthly premium by about $6 per month and for some that might not seem like a lot, but those who are struggling to make ends meet as it is, $6 dollars can be a burden.

For most of us that means sacrificing a hamburger at lunch once a month or maybe even taking a bus instead of driving the car one day a week. In and of itself those are not bad sacrifices to make anyway, but what if coming up with those $6 dollars meant finding ways to cut even more vital things out of your monthly budget? For people like Maria, those few dollars add up and they could even boil down to a quality of life issue for some in her position and that could have long reaching impacts.

“I see things going up everyday,” says the 67 year-old west Corpus Christi resident who lives off of a drastically fixed income. “Any mandatory increase in anything really causes me to feel a financial pinch.”

For Martinez, she says it comes down to being able to afford a doctors office visit or even being able to afford a discount medicine at a big box pharmacy.

“When rates go up it changes everything and people like me are being discriminated against,” says Martinez, who made her life working in the local food service industry alongside her husband who passed away over 10 years ago. “We did not have the luxuries of a solid retirement that some people have. We only had what we needed and with all of these increases I am really feeling it”.

To many, including LULAC’s own Susie Saldana, a rate increase is flat out discriminatory.

“This is discrimination against an entire region and it’s people,” Saldana to The South Texas Journal in an interview for this article. “And let me tell, we are not going to take it.”

Saldana notices what even TWIA itself does not seem to notice and that is how the organization’s Actuary Committee seemingly disregarded state lawmakers by suggesting any rate hike at all. TWIA denies that to be the case, but to others it was clearly the case.

In a 7 page rebuttal to a potential rate hike, Committee member Stephen Alexander noted that such a recommendation does exactly that. His rebuttal said that “TWIA’s rate adequacy analysis is not in full compliance with applicable Texas law and actuarial standards of practice.” Just that alone causes people to come to attention.

Detailed in Alexander’s rebuttal he notes that the 2019 rate adequacy analysis information posted on TWIA’s website back on July 22, 2019 does not satisfy the legislative requirement, because the model “output data” is not “sufficiently detailed to allow the historical experience in this state to be compared to results produced by the model”.

TWIA spin doctors obviously did not like Alexander’s objection and for him (or anybody else) to imply that they were acting beyond the law or outside even the will of the people was simply a ludicrous thought. But state lawmakers and those who sent them to Austin did not feel that way about the matter.

In fact, TWIA was sent a bipartisan letter on multiple occasions by at least 17 members of the legislature. And while 17 people of 181 members of the Texas Legislature might sound like a small percentage, many of those hold some very powerful positions.

In their own defense TWIA says that the recommendation was perfectly within the confines of the Texas Insurance Code but that claim is a matter of opinion.

“I am dismayed and offended by the Texas Windstorm Insurance Association Actuarial and Underwriting Committee’s decision on Nov. 19,” State Senator Judith Zaffirini told the Journal. “As the insurer of last resort along the Texas coast, TWIA should be sensitive to the ongoing efforts of families and businesses to rebuild after Hurricane Harvey. A rate increase would be not only insensitive to them, but also a potential obstacle to new housing and crucial economic development projects.”

In a strongly worded letter to the TWIA Board of Directors on Thursday those same state level lawmakers showed their frustration at how the TWIA Committee and the entire agency is acting.

“As Texas legislators charged with representing the interests of coastal residents and business owners, we are outright offended by the rate increase recently proposed by the TWIA Actuarial and Underwriting Committee,” the letter began.

To make extra certain that the beleaguered association ended up with the right message the lawmakers ended the letter by saying “We also expect that the TWIA Board andCommittees show respect and attention to Texas legislators’ requests.”

Chambers County Republican State Representative Mayes Middleton told the South Texas Journal that he too felt like the recommendation was out of line and that the agency show some common sense in the matter.

“I think what ought to be done is that we move the TWIA Headquarters to a Coastal community,” Rep. Middelton said. “That way their staffers will have to deal with the mess.”

But does TWIA care what the legislature really thinks? Apparently not according to TWIA Actuarial and Underwriting Chairperson Debbie King. King is an insurance champion through and through and judging by her disclosure statement it is no doubt pretty obvious whose side she is on.

In an email obtained by the South Texas Journal King shows what many believe is the most controversial statement of all–a slap in the face to the lawmakers and the public.

In the email, King tells the recipient that lawmakers were simply playing to their constituents and makes a passing reference towards fellow committee member Stephan Alexander who filed the 7 page rebuttal by saying that “they” do not know who he (Stephen Alexander) is.

The South Texas Journal reached out for comment from King and from TWIA who said that “the best way to get comments from committee members was to listen to a playback of the conference call.”

But what about discrimination and is it really going down that slope? According to the Texas Department of Insurance rates are “required to be reasonable, adequate, and not unfairly discriminatory.” But for people like Maria Martinez, their lives could totally change if rates continue to go up.

“It is not just $6 dollars a month,” says State Rep. Todd Hunter, who has been one of the most vocal voices in the fight against TWIA. Hunter points to the fact that mortgages could change and other banking related factors could be influenced at the consumer level by any rate increase and that could mean that people like Maria Martinez are forced out of their homes.

What can be done? First off, the rate increase is just a recommendation at the moment and it still would need to be approved by the Board of Directors at their December 10 meeting. From there, the rate increase would go to the Texas Department of insurance where it would again be evaluated.

“We still have options,” says Rep. Middelton. “This is in no way over and we must continue to fight.”

From an ongoing standpoint the fight is far from being over and the disregard for the Texas Legislature is not likely to be ignored anytime soon.

“My colleagues and I will continue to prioritize the fair and proper implementation of our recent legislative reforms, and we will not hesitate to take additional action in future sessions to ensure TWIA operates effectively,” Senator Zaffirini told the Journal. “Fortunately, the rate increase has not been finalized. I strongly urge TWIA’s board members to be responsive to their communities and to reject the proposed increase at their December 10 meeting. Critically, this would give coastal residents additional time to rebuild their lives after Hurricane Harvey while also allowing our reforms to take effect.”